AM Best reaffirms PVI Insurance's excellent A- financial strength rating

Saturday, Mar 30, 2024 09:20

The leadership of PVI Insurance received a financial strength rating of A- (Excellent) from AM Best representatives in March 2023. — Photo

AM Best, a global rating agency specialising in the insurance industry, has reaffirmed the financial strength rating of A- (Excellent) for PVI Insurance Corporation (PVI Insurance).

The global rating agency has also assigned the National Scale Rating (NSR) of aaa.VN (Exceptional) to PVI Insurance with a stable outlook, given its strong performance and stability in the market.

The financial strength rating reflects AM Best's assessment of PVI Insurance's robust balance sheet strength, characterized as very strong, as well as its strong operating performance, neutral business profile, and effective Enterprise Risk Management (ERM). Additionally, PVI Insurance benefits from the support of its parent company, HDI Haftpflichtverband der Deutschen Industrie V.a.G. (HDI V.a.G.), which further enhances its rating.

PVI Insurance's balance sheet strength is underpinned by its well-managed risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is expected to remain at the strongest level over the medium term. The majority ownership by HDI V.a.G. provides PVI Insurance with substantial financial flexibility.

AM Best views the company’s investment portfolio to be of moderate risk, with the majority of investments allocated toward cash and term deposits and the remainder held in non-rated corporate bonds, affiliated private equity investments, and real estate. However, there are considerations such as a high dividend payout ratio and significant reliance on reinsurance for large commercial risks.

In terms of operating performance, PVI Insurance has demonstrated strength, with the past five-year average return-on-equity ratio of 17.9 percent and robust underwriting profits of a combined ratio of 92.7 percent in 2023. This favorable performance is expected to continue in the medium term, supported by profitable results in commercial and industrial lines of business.

AM Best considers PVI Insurance's business profile as neutral. The company has solidified its position as the largest non-life insurer in Việt Nam, with a strong presence in commercial and industrial lines of business, including energy, property, engineering, aviation, and marine insurance. Its affiliation with the Petrovietnam group and support from HDI V.a.G. are expected to enhance PVI Insurance's market strength. — VNS

Comments (0)